Oando is awaiting approval to take over Agip Oil, Gas and Power Assets in Nigeria.
Newsonline Nigeria reports that Nigerian energy company, Oando is set to acquire the Nigerian Agip Oil Company (NAOC), a subsidiary of Italian energy group, Eni after a deal was signed to that effect, both companies confirmed yesterday.
NAOC has interests in four onshore blocks and two onshore exploration leases as well as two power plants in Nigeria, Eni said in a statement, but did not disclose the financial details of the accord. The agreement is, however, still subject to regulatory approval.
Apart from Oil Mining Leases (OML) 60, 61, 62, 63, NAOC also has interests in the Okpai 1 and 2 power plants with a total nameplate capacity of 960 megawatts as well as in two Onshore Exploration Leases (OPL) 282 and 135, for which it also holds operatorship.
However, NAOC’s participating interest in Shell Production Development Company (SPDC) Joint Venture of 5 per cent, is not included in the perimeter of the transaction and will be retained in Eni’s portfolio.
“Following the transaction completion with Oando PLC, Eni will maintain its presence in Nigeria through Nigerian Agip Exploration (NAE) and Agip Energy and Natural Resources (AENR), reiterating the company’s commitment to its employees health and safety, as well as to the environment.
“Eni continues to operate in the country focusing on operated offshore activities. Participations in operated-by-others assets, both onshore and offshore, and Nigeria LNG will remain in Eni portfolio too,” the global oil giant noted.
Eni added that the transaction is consistent with its 2023-2026 plan, wherein the upstream will supplement the core “organically led growth with inorganic high-grading activity”.
To this end, the company emphasised that it will be adding resources with incremental value while divesting resources that can offer greater value and opportunities to new owners.
“The closing of this transaction is subject to, inter alia, the authorisation of all relevant local and regulatory authorities,” the company pointed out. The sale is expected to nearly double Oando’s reserves to 996 million barrels of oil equivalent.
Aside NAOC, other International Oil Companies (IOCS) like Shell and Exxon Mobil, have sales underway even though they are currently bogged down with legal and regulatory challenges.
The companies have blamed rampant oil theft and spills, incessant clashes with communities, more focused exploration budgets as well as the need to embrace the new energy transition train as some of their reasons for divestment.
Also in a statement announcing its agreement with Eni for the acquisition of 100 per cent of the shares of NAOC, Oando confirmed that the completion of the transaction was still subject to ministerial consent and other required regulatory approvals.
It listed some of the highlights of the deal as the increase in its current participating interests in OMLs 60, 61, 62, and 63 from 20 per cent to 40 per cent.
It also increases Oando’s ownership stake in all NEPL/NAOC/OOL JV assets and infrastructure which include 40 discovered oil and gas fields, of which 24 are currently producing, approximately 40 identified prospects and leads, 12 production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River oil terminal, the Kwale-Okpai phases 1 & 2 power plants and associated infrastructure.
Based on 2021 reserves estimates, Oando said its total reserves stand at 503.3MMboe while the transaction will deliver a 98 per cent increase.
In addition, the transaction grows Oando’s exploration asset portfolio through the acquisition of a 90 per cent interest in OPL 282 and 48 per cent interest in OPL 135.
An excited Group Chief Executive, Oando PLC, Wale Tinubu, commenting on the deal, said that the agreement underscored the role indigenous actors will play in the future of the Nigerian upstream sector.
“The synergies created by this acquisition will unlock unparalleled opportunities for us to re-align expectations, enhance efficiency, optimise resource allocation, and significantly increase production.
“ Furthermore, it is in alignment with our strategy of acquiring, enhancing, appraising, and efficiently developing reserves.
“Today’s announcement is not just an important milestone for the future of Oando; it brings to bear the important role indigenous actors will play in the future of the Nigerian upstream sector,” he stated.
According to Tinubu, having achieved the significant milestone, Oando was looking forward to closing the transaction and harnessing the full potential of the enhanced platform to accrue value for local communities, stakeholders, and shareholders.
Like the other assets in contention, it was learnt that the current deal will have to be approved by the Nigerian Upstream Petroleum Regulatory Commission (NURPC).
It is also expected that the Nigerian National Petroleum Company Limited (NNPC), if interested in the deal, will have the right of first refusal of the oil, gas and power assets as per the Joint Operating Agreements (JOA).